Indian Cement Industry

Cement is an essential commodity when it comes to the building of a nation. Almost all kinds of infrastructure development work involve the use of cement. The cement industry is a thriving sector among the manufacturing giants of our country. It makes use of non-metallic raw materials such as limestone and coal. India set up its first cement plant in the year 1904 in Porbandar, Gujrat. However, cement production first began in Madras in the same year. Since then, the Indian cement industry has undergone a great deal of evolution. 

Today we have alternatives to limestone and coal as the raw materials for producing cement. These alternatives include sludge, stage, and oceanic shells. Cement production plants in Dwarka, Thiruvananthapuram, and Chennai make the use of oceanic shells for manufacturing cement in the present time. In this article, we will focus on the geographical distribution of the cement industry in India.

Which are the Cement Producing Regions in India?

Cement production takes place across the country as, over the years, the number of cement plants has exponentially increased. In terms of production capacity, the Northern and Southern parts of the country are leading with about 73.7 MT (million tonnes) and 136.1 MT of cement production respectively per annum. The Eastern and Western regions also contribute 47.8 MT and 49.4 MT of cement respectively. Central India chips in about 50.9 MT of cement per annum. In terms of utilization, the Western region comes in with a statistic of 88% and other parts of the country also display numbers such as 87% in northern India, 80% in the east and central India, and 50% utilization in the south. The image below will help you better understand the geographical distribution of the cement industry in India.

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If we talk about the production of individual states, Madhya Pradesh tops the list as the largest cement-producing state in India with over two dozen plants for the manufacture of cement. Second and third on the list are Andhra Pradesh and Rajasthan with 19 and 15 cement plants respectively.

Below is a list of the leading cement-producing states in India and their major hubs of production.

1. Madhya Pradesh

Centers of production: Neemach, Maihar, Durg, Satna, Jamul, Katni

2. Andhra Pradesh

Centers of production: Adilabad, Krishna, Cement Nagar, Karimnagar, Vijayawada

3. Rajasthan

Centers of production: Udaipur, Chittorgarh, Hour

4. Karnataka

Centres of production: Bhadravati

5. Gujrat

Centres of production: Porbandar

Fulfilling Domestic Demand and Exports

These various plants strewn across the country produce enough cement to meet both the country's domestic demand and also have a surplus for exporting abroad. The Indian cement industry has a reputation for the export of cement and clinker all over the world. According to statistics, in the previous decade, India has had a record of exporting an average of 4.5 million tonnes of cement per annum. The major contributors to this number are companies such as Gujrat Ambuja Cement Ltd. and L&T. Statistical study predicts steady growth of the Indian cement industry, and experts say that we will produce over 50 million tonnes of cement per year to specially meet the rising demands of the real estate sector. The production of cement will go by 9 to 10%, and this increased production will positively influence the overall Gross Domestic Product (GDP) of the country.

Increasing Investments for the Indian Cement Industry

• The inflow of FDI to facilitate the manufacturing of products such as cement and gypsum reached about 5.87 billion US dollars between April 2020 and March 2021.

• In the present year 2021, we are seeing a rise in the levels of remote work in the middle of the pandemic, and this has given rise to a new demand. There is a need for affordable houses within a budget of 40 to 50 lakh rupees and there is a boost given to the building of these houses in Tier 2 and Tier 3 cities across the country. This scenario is highly profitable for the Indian cement industry as the demand for cement will steadily increase owing to the commencement of these projects.

Long-Term Potential for Growth of the Industry

• The establishment of an oligopoly market scene, where the major cement producing companies will have partial control over the pricing of the commodity.

• A predicted a steady increase in demand for Indian cement due to consistent levels of customer satisfaction and product quality. Therefore, there is little to low threat from competing foreign companies of substitutes.

• The reputation of the Indian cement industry for being one of the greenest cement manufacturers in the world will give us an edge over our competitors due to increased goodwill among customers.

• In the Union Budget of 2021-22, a huge allocation is present for kickstarting various socio-economic infrastructure projects such as the building of industries, affordable residential houses, roads, etc. Apart from the promise of boosting the economy, these infrastructure projects will pave the way for a huge surge in the demand for cement across the country. This developmental plan will thus give a huge boost to the domestic cement industry.

Did you Know?

• The Indian cement industry consists of over 130 major cement production plants and over 365 sub-plants and factories. We produce around 240 million tons of cement per annum, making us the largest producer of this commodity in the world, after China.

• This industry is worth over 90,000 crore rupees or over 18 million USD. The leading four cement companies in India which include Ambuja Cement and UltraTech Cement take up 40% of this market share.

• The northern and southern parts of India account for the maximum percentage of cement consumption. Of this, a major contributor is the housing sector.

• If we focus on the geographical distribution of the cement industry in India, most of the major cement plants are seen in the western and southern parts of the country.

• This sector grows at an astounding rate of 10% per annum.